perhaps folks would have liked something a little more confrontational. they'll to have put me up against someone i don't consider a friend of more than a quarter century standing but it's been a great pleasure and i wish you -- >> guest: it's been delightful. >> host: i wish you good luck on the book and may you be prosperous. ..
en factor increase in order to restore the country. >> it's a pleasure to be and this is a labor of love we introduce our speaker today i got to know andrew when into a process he contacted me and we worked out in number of different things and of course any time a local company that's brought up by an national with this case international company if you're the mayor or governor you are worried that the debts of the company's common to be taken elsewhere and there's quite a contract rather than expansion and first of all was honest and said there's going to be some short-term for pennsylvania this is a great opportunity for growth and he
has lived up to his word in the very short period of time and he's not interested in losing jobs for america or for dow, but gaining jobs and the right type of jobs which is why he is here today. he's been there for 34 years. i think most of you know dow is a 54 billion-dollar company that sells special chemicals, plastics and advanced materials and is an extraordinary company that is in most major countries of the world and cells to virtually every country in the world. andrew is an alcee by birth and very active at home in australia with his university and places but he cares very much about the united states of america and very much about americans. i had the chance to speak at the business council which is an organization of 150 ceos and 150 biggest and strongest
companies in america just last week andrew was the vice president of the council and asked me to come down, and one of the things i spoke about was the need for us to continue to invest in our growth and things like infrastructure, infrastructure is important to the future of the country and infrastructure means manufacturing and it is my strong and abiding belief if you have a country that doesn't produce anything you are cooked, we are simply cooked. we can't be a service economy, we can't be a high-tech economy, we can't be in inventing economy, we have to make things and we have to make cutting edge things but also continue to make things that are traditionally manufactured as well. andrew has spoken out on behalf of that initiative with this great book "make it in america," and i would like to come before you and say it's such an exciting book i bought a copy but ander sent me a copy.
[laughter] and i just want to introduce to ander by giving the quote in an interview which i think is extraordinary because it sums up what the united states should be doing and president obama in his state of the union address got a right we have to continue to invest in our own and growth, invest in education and innovation. the r&d tax credit, ander talked about the r&d tax credit and i'm very proud of pennsylvania during my time as governor we quadrupled our r&d tax credit, but i don't know if all of you understand we don't have a permanent federal r&d tax credit, and that is a big disincentive to business growth here in the united states but he had this interview and andrew was asked a question about china, obviously our biggest competitor and someone i believe every area of endeavor and when
it comes to manufacturing line is china getting right at the united states is not, that is the questioner. andrew implied the chinese do, not just the chinese but other countries that i referenced in the book such as germany is the history holistic approach to and factoring. it's a strategy. basically the same manufacturing is a vital part of my economy. it employs people, pays them great wages. so they have a country strategy, the approach it as a country and those of us that are free marketeers would say you know, that's government interference, well i don't see it as government interference, i see that the public sector has established a reasonable rhode the private-sector knows what those rules are and therefore we can compete. can america compete as a manufacturing company -- country? i believe we can and i believe we must and the greatest proponent of that idea in the
country joining with union leaders and others is andrew liveris and we are honored to have him to a. >> thank you. [applause] >> thank you, governor rendell and robinson and for that warm introduction. in fact, i didn't realize the governor would give my speech for me and i could stop now because in every sense of this is a governor who has given the speech before. he's given it over and over again as the dean said in his introduction so it warms my heart to have to hear, in pennsylvania, special champion for the country and i welcome you as a champion of public private partnership, something which struck me the minute -- can you hear me i think i lost -- something that struck me the minute i met the governor and he referred to that. do you know in your time in
office he wouldn't have said it out yourself but one statistics that matters that i referenced in the book about germany he doubled the exports of the state. he doubled the exports of the state, so it can be done. and, you know, it's a lot of work to engage people in the national conversation. it takes addition, it takes courage, it takes a belief. you have to have the belief system because there's a lot of people who do not want to engage in this conversation so governor, it's great to have you here and it's an honor to share the often noon with so many business leaders in front of me. i do want to engage in this conversation today. why? welcome to state the obvious, you're building a future. a talent, knowledge, entrepreneurial work, efforts to get yourself here, believe it or not, and i assure you see a few ceos at this great school and we are going to say over and over but i will say from my vantage point we need to more
than ever. if you listen to what's coming out of washington as the governor referred, the national conversation has begun. you know business is now being engaged and business is a unique potential and ability to innovate, create those jobs the governor referred to, to fuel prosperity coming and we are all beneficiaries of yesterday's hard work that fueled our current prosperity. but the conversation is showing that it is once again this nation's business, the business of business is coming and others of course there's bird in philadelphia being the key. that's not just true of the united states. i could equal the -- as the governor referred to we adopt in many countries i could take that book and say may get somewhere else. me get in america is not a
unique foot. but really here in america it was a fault that wasn't being expressed. when the downturn began several years ago, the downturn the will be known as the great recession, there was a lot of focus on business, finance in particular, and really the focus was how things have gone wrong. well, what's really happening today is how to make things go right and all of you have a role to play on how things can go right. a lot of us who employ people like the company i work for are counting on it. we need you intellectually curious, engaged with practical thinking on how to make things go right. you know, your impact on the country store from including this great country cannot be minimized. it's nothing short in the goals
of economic growth, job creation, the preservation of our fragile planet and environment, the quality-of-life, quality-of-life itself. i can't think of more noble goals for today's leaders and today's business leaders like myself. we see it as an opportunity in the world, a world that really has no horizons and it's felt lonely and the board rooms been living rooms and dining rooms and playgrounds and villages and cities around the world. i went to over 30 countries last year. it's the same conversation everywhere. how do we get these noble goals and put them into a reality. there's a lot of responsibility that goes with answering that question as populations grow and resources diminish its more important than ever that
companies, companies like dow deliver and smart answers not sustainability or profitability, sustainable and profitably they do not distinguish themselves anymore. they are integrated, and as a global competition heats up, nations, countries need to be just as the leverett. national capitals need to be just as smart making sure not only their economies grow no matter what the per-capita is that in fact we create sustainable growth. sustainable prosperity no matter what stage the turn into. so context like the word around the world without a conversation but today guess where i am, the
nation's most storied locations i do really want to focus on the united states. this is my first talk to an m.b.a. class or class that's interested in business. i get lots of invites. i really wanted to come here when tallman and others asked me about a year ago and i felt privileged to be asked to follow other great speakers you will get to hear but i am an australian with a unique world view and amazingly indecently proud of this country. this country is a beacon of light and we need to keep it there so i'm going to focus on the united states, on our places and with those choices come consequences. and the perspective i'm going to speak to you from as the governor said is from the world of manufacturing. 35 years almost working for the great manufacturing company i am
proud of the manufacturing sector and proud to work for one of the largest that came from the united states. in fact, this book, make it in america, is the product of the women and men of the dow chemical company on just the current employees but the generations that preceded us that created this prosperity i referred to because make no mistake with this dow or from the vantage point of your institution we do truly stand on the shoulders and the giants that preceded us and i think it's important we honor them with our future vision that builds on that. so, i'm going to tell you something you probably don't hear very often. we are right now entering a golden age of manufacturing. a golden age. you heard me correctly. i know that statement might surprise you. i don't see it written in in the
headlines or hear it on meet the press, but it stuns most audiences in america when i say it. because the united states become accustomed to the same, to the loss of manufacturing jobs, the closing of plants, the suffocation that's going on in mainstream america and small towns and of course big cities, who has been on the amtrak connecting new york with the great city of philadelphia? what is the site on both sides of the real world? one called the global by works. any clue what they might have done in this industry? dyes, pigment. no more.
but manufacturing world has passed. i might see the golden era of dyes has truly move to to some labor cost country. you see, that's the problem. in america we associate what is on the side of the railroad lines and manufacturing. i often joked with my ceo friends in the high-tech silicon valley world that they stole our word. who said information and technology should go to get there? who created information technology? manufacturing technology did that and still does it today. you know, fi sometimes when my to the courses and teach at other schools efiks recently
i've gone through the curriculum to look the topic about to talk about in that case it was ethics. i thumbed through your curricula and this is one of the world's greatest business, right? i couldn't find one course with the word manufacturing. not one. i don't know, dean. [laughter] i saw lots of courses with the words information and technology. i saw lots of corporate finance, banking, private equity, management consulting, noble pursuits. they served me well. [laughter] dwell on that. i'm going to get back to that. you receive the action to be in these important and exciting
fields. there's a whole web fertilizing campaign in the fallen victim to and it's called the were of the dollar. you are in the so-called consumption and i need to pull you back. i need to pull you back into the swirl of creating value. i need to teach you in a very short period of time what that means. advanced manufacturing is a term that we've cleaned and others have picked up. we've picked up by traveling the world and seeing what china is doing, what the germanys are doing, singapore and brazil, and when i have discussions like this in audiences with your demographics in those countries and i see manufacturing, they immediately think advanced manufacturing. they don't think global dye
works. they think semiconductors and advanced technology to support medicine. they think advanced purification, they think solar. they live and breed of this high-tech center that you consume. they feel the power of manufacturing because it creates millions and millions of jobs in their economies. jobs that were at the centerpiece of their economy. as the governor said in my quote, is a national strategy. countries like this are truly creating wealth and value by investing in this highly technology in rich, highly advanced manufacturing sector, highly specialist where the image isn't dyes but people with masks operating at the level so that impurities can't get there. you've seen those pictures. i know. building semiconductors, wind
turbines, solar cells, advanced batteries and i can go on and on. it's not the old definition. it's not smokestack or steel. it's not the global dye works. so, these are issues changing the world before our very eyes and the way we live in it. more and more nations around the world understand that and understand that power. they embrace it. it creates prosperity which increase creates demand and the need for the human capital. what type of human capital? research scientist, engineers, and therefore they need these people taught at universities so they are building those universities and they are producing the human capital that ultimately produces the innovations centered to their economy.
it is a virtuous circle, you see coming and its stunning when you see it our work. when you see their own demand creating their own human capital taught by their own countries it creates an advanced manufacturing society like we used to have. so therefore it is critical of this country embraces it once again. manufacturing matters. whether i'm in singapore or moscow or a stumble or sold or johannesburg or so paulo, it matters. it matters in terms of the jobs it creates and the types of jobs that it creates. and in fact, it does one other thing. it stimulates the human intellect to salt the necessary challenges that our world currently faces. whether it is harnessing energy from the sun or purifying water from the sea.
you see, manufacturing creates more jobs in central areas throughout human life than any of their sector and then and as one other thing. in fact it creates lots of jobs around those jobs. it's a vital sector. it creates a ripple effect throughout the economy. you know, even in 2009 when the manufacturing experience is the sharpest decline to date this sector in the united states still supported 7 million direct manufacturing jobs, 7 million, jobs that then turn supply to extensive supply chain now that some jobs that affect thousands of small and medium enterprises. the multiplier effect according to the analysis and is by far the biggest of any sector has been looked out that for every dollar in the manufacturing sector there is a dollar 40
created around in the supply chain. the service sector some of which i refer to already only supports half of that amount of value. only supports 50 cents around it. so, when you look at this country, the great country and its 9% unemployment rate, and unemployment rate that current job creation can barely keep pace in keeping it 9% there's no question in my mind where jobs need to create come from. as the governor pointed out, only manufacturing, the fall you creation of manufacturing can create the jobs new america needs, and only manufacturing cans of the major challenges the world faces, the rise in demand for energy, the need for clean water and sustainable housing and affordable medicines, the need for sustainable solutions of all kinds who come from the
scientists and the technology places that are embedded in the and danced manufacturing sectors so when it's done right and advanced manufacturing sector can create solutions for sustainable society, create value when it doesn't and thereby complete the virtuous circle. that's why we have transformed our company to a modern-day enterprise that is currently investing more in r&d than it ever has in its past. mine billions in the last five years alone and it's building science based jobs in the united states. we have decided to be countercurrent. we've decided to back the country. why? because the country is the dna and i'm going to return to that point the gun fire referred to. and also because we see transformation of the country and as the enterprise as the same thing and the sustainable
enterprise in a sustainable country is a symbiotic relationship. one that is borderless, one that is sustainable outcomes, sustainable solutions consisting of all opportunities, sustainable profits. i hope you heard by now but i've made the case for an end since manufacturing strategy for the country. let me just keep on and talk about what other countries to at competitors if you like and that is something we don't use in the united states very often. other countries are our competitors. competing for job creation, nothing in their dressing about that. after all was the marketplace. so we need in national approach not just to compete but like in every pursued that you pursue to win, winning is good. we should want to win as a
country. so what happens when i go to these countries competing for the dow chemical's capital? what are they doing to when i ask the questions what are the costs of the long term in this country. with the cost of building an asset in your country? with access to we have to your markets? what access to we have to the human capabilities, scientific and other kinds, what sorts of tax credits to you have enough r&d and what sort of regulations to have to comply with so i cannot bring to the minimum standard which is the highest of any where i operate in the world but i can have certainty. how can i skilled in the country and how the institutions work with me, public or private sector? now if i get a blank face and premature that country doesn't have a strategy. when i get like singapore court
to every three weeks or four weeks from the chicago office of the economic development board promising me not just with the incentives in the world to answer the questions but for books that support all of the case studies they've done in putting all of the companies did attracted over the last 40 years with case study after case study after case study of why they've lived by their word i'm pretty sure singapore gets it. they understand what it takes to compete for the business. they are productive and addressed regulations. they addressed taxes and energy policy. they've addressed the health care, they've got frameworks, the rules of the road. and of course they want to win. so they've benchmark other countries and the show where their country is and those particular items and they say by
the way in your industry and particularly one that sector i want evidenced work. i want advanced biotech, i want for a devotees come and to get that sector i want to give you this on top. that's the world out there, folks. it isn't a blank stare. they are winning jobs. they are partners to business. they are mitigating risks. governor rendell knows this well. he did this and it worked. america is the nation isn't doing that. success of the federal governments have not put a holistic view to attracting value creating an effective and jobs to the country. as i said in an interview the private sector really gets the answer is it needs because we don't have a holistic strategy
we ask for frameworks and did burdens. the last ten years, just under ten years the u.s. manufacturing sector has accelerated its loss of manufacturing jobs. then in effect in a sector which employs 7 million as i mentioned earlier lost 5.5 million. 5.5 million manufacturing jobs in advanced technologies left the country in the last ten years. that is a complete food of the sector. the national posture has been passive. we've left the big questions unanswered whether they be on energy policy, taxes, regulatory reform, they've been unanswered. there was a profound policy uncertainty in the united states. we are lacking the courageous leaders like governor rendell who don't mind not being elected the next and although he did it
take the courageous stands and saying i'm not operating in the two full six year cycle and operating for a country for the state. the lack of certainty is killing manufacturing, killing manufacturing. the manufacturers has found the structural cost of minn factoring generically in the united states, not including labor 17.6% disadvantaged against the highest of our foreign capitals. which happens to be japan by the way. 17.6% more expensive than the highest of the oecd. when you have to invest a billion dollars which is what an average facility of mine might cost 17.6% made junk change. that's real money and i can
guarantee one way i won't be speaking to you one year is if i don't get my shareholders that return. when they say to me why are you possibly investing in the most expensive facility here to pay to the one that is 78.6% last in the next highest country that's a lot of money that is left on the table. there's another argument is central to what living is an affecting job growth. i've heard the argument and seen it in the headlines it's just natural to use these jobs. it's the we of the world, you know, long ago athens, the ottomans, u.k., they all have their days in the sun doing what they did to be the biggest economy in the world at the time. we are just morphing to the next phase of our economy. wages a trooper in the world. it's natural we use these industries and manufacturing
besides as long as we keep innovating it doesn't matter if countries like china to all of the building and manufacturing. it's fine i can live with and might have that says designed in california built in china. i'm fine with that. i still have my ipad. i think that is a common view out there. those views are 100% wrong. long ago did global dye leave for footwear or textiles orman factoring, that is in the current head wind. it happens to be with the media occasionally talks about when they talk about outsourcing and offshore buying you're completely wrong. it's nothing to do with the wage price. keep in mind that 78.6 structure i talked about. it's not labor cost advance, often the costs are small
percentage of the total cost. besides if it was sleeper cost how do you account for germany? germany has a vibrant high-tech manufacturing sector that actually exports 50% of their gdp. so, we know it's not labor cost. here's why there is a hypothesis of the case we can stand idly by and blame it on something like we were cost. here's what's wrong with that thesis of designing california building china. here is a statement that is a tipping point statement. when manufacturing of the high-tech goes, r&d will follow. innovation will follow. take the electronics industry. at the beginning it was outsourced and of short because of labor, the flex tropics of the world, assembly, the was the beginning as the country's learn
how to assemble a default national strategies to an event in the advances the the to devices that surround the chip and they started building a chip plants, and then they worked out how to integrate the devices and systems and created their own tvs and lcds and phones and all the things we use as gadgets and than they created around that the are in the centers but then were fed by the universities that were a national strategy to outgun the next device. so, the failure of nokia and ericsson to keep up with ray samsung is because if you visit samsung, the campus just outside of seoul, you will leave with a tremor. you will say there's silicon
valley being rebuilt. by samsung. in national champion of korea. you will not win if you think that ultimately these industries once leading the united states will keep innovating this country. here's the other thing that goes with it. as you lose the employers that build and to the r&d, the scientists and engineers the you need to do the r&d will increasingly not come from here. and the ones that do come from here will go back there. does that sound like a national debate we are part of? if you are reading the newspapers and what is happening in this country around technology and math education is a national strategy to be a tragedy. many of you from other countries
who may study through the visa system failing us and being forced to leave because you can't get employment here. this sounds like we are doing a blank stare and leading manufacturing leave and say to the scientists educated in this country you know what, we don't care if you leave because you are going to get jobs over there any way and the innovation finally leaves. we at dow chemical build a center in china three years ago and currently employs 500 chinese scientists. they are already double the productivity rate of the patent protection than the best alternative lab in the world. they're smart and we are employing more and more of them coming back from the u.s. universities in that center. in fact, of the ten u.s. companies that spend the most on
r&d, eight of them already have the facilities in china and india, not just factories, but high-tech facilities, modern technologies. it's not too late to do something to balance this from the united states. as the governor says we have a lot of experience operating in 37 countries and manufacturing sites and sell 150. we believe there is still great value to be built here in the united states. we have a major city that and is still with us. still the largest economy in the world we're still the largest manufacturing economy in the world. we still have critical mass and scale ability at this point. we have a first-class university system turning out high school workers and a flexible mobile productive work force, and we still have, despite what i said of the visa one of the best
immigration systems in the world. that is why in addition to the incentives the governor dave, we stayed here in philadelphia and pennsylvania. we said the east coast corridor of the country and the acquisition could be used as a tipping point. we said if this governor and this government and this may year were willing to be a partner to us we could create a framework to build an advanced manufacturing, lubber trace, we have one of here just north of us and at springhouse we can build on and we can build the intellectual capacity right here in philadelphia. as he said, that wasn't the inbound thought. the fault was we would have to consolidate back to michigan and texas and all of these jobs to be lost. it is not irreversible if the
government take a active pro-active look at how to create the value manufacturing in the country and states like this one. so, we see the united states is still a hub. the growing overseas is not a threat. the we restructure our global operations, as my fellow ceos in the manufacturing sector say over and over growing overseas and growing local the symbiotic. even if we build factories overseas we can still create high-value added jobs here if we keep the skill ability and critical mass. however there is a threat. and it's a threat the size of which the world has never seen. it's a threat and it's a competitor. it's a partner, and it's on the march. and that's china. who of you have been to china in the last year or two.
not enough of you. all hands should go up. china is on the march. china as it grows and as it becomes larger and of course it is not the second largest economy in the world and has the opportunity the next 15 years to be larger than the united states, china has a deliver a holistic strategy around advanced manufacturing. that's why it is already the number one solar manufacturing country in the world. it's on in march and as defined in its next five-year plan seven hightech sectors that it will build in the next five years, and when i say it will build, it will build. it's what they do. it's a command control government, so they can. there's a consequence to that which i'm not going to address in this lecture by just putting in a from a competitive point of view it is real.
they can become a hub not the spoke to read the hub and spoke systems work just fine as long as we have the hub and operate on the spokes as national champions. when we compete against national champions coming out of china the size of their market with subsidized capital and subsidized in part, frigate labor and the barriers are not skilling anymore, they cannot innovate you. i think this is the biggest threat the united states faces. and in fact, i will give you a statistic. according to the national science foundation, only 9%, 9% of all u.s. companies had participated in product innovation in the last three years. if that statistic doesn't alarm you that the greatest companies coming out of the united states only 9% our active innovation
that is contrary to your thinking because you think of google were ebay or the current industry is largest innovating like crazy everywhere they are not innovating here. only 9%. innovating in the united states. so, would you see this a crisis? we do and we believe the response must come in the form of a national strategy that recognizes once and for all the global economy isn't a level playing field and the pleading field will not level itself, government around the world see this, the governments in the united states state and federal need to see it too. many business leaders reference reject the idea of government interference with business. i don't think we should see it that way. governments of the rule of the road i'm definitely a firm believer in free markets but as i've learned the last few years
sometimes the wisdom of the markets feel less. the collective good sometimes persisted by the markets and greed in fact just like wall street should you in that instant they do not insure the global and national economic conditions are taken care of. markets can never be a substitute for the kind of long-range thinking the government provide. only government can create the kind of policy frameworks' the give businesses a sense of certainty and sense of stability as the world becomes more volatile and more of a threat. businesses operate in those remarks that create value and create jobs. i'm not calling for bigger government, please don't misread it. efficient government that can be a partner to business to help us with predictability and certainty and i mean all the states in the united states.
it's a disgrace it takes months to get one permit and in texas it takes nine days. why are those differences existing? so, we need to change to one of the general collaborative spirit for the greater good, for the national interest the public and private sectors need to work together in peace frameworks and that's why we wrote the book me get in america. we rode it to share these concerns but not just steep the problems that give solutions. i would encourage you if he can to read the book. it gives proactive solutions to the topic i described today. i'm not going to go through for the sake of time that it speaks to the exact solutions and not just of the solutions but the process to get their by which washington can be engaged and the states can be engaged where elected leaders can step out of their shells and be engaged in business they can reach out to
ceos like myself and many of my colleagues who are more than ready to do it has used all of the business council last week governor rendell. history shows whenever that happens that in fact good things occur. i'm reminded of president kennedy's clarion call when he says we choose to go to the moon in this decade and do other things he said not because they are easy but because they are hard. the response to that call was extraordinary, by engaging business to that call president kennedy unleashed a novation like the country had never seen in the modern era. from that, from the space program come from the are indeed the government support that the time came innovation like solar panels come ultrasound scanners, surgical technologies, medical imaging, the computing age was born from that era. president kennedy called on america's can-do creative spirit and challenged the soul of the country and america delivered.
so again will america deliver again? with these traces i talked about, can we look at them holistically, not left and right, democrat and republican, but work for the national interest where the policies come together and address fundamental growth? that's our choice and as these truces have consequences i think if we don't recognize them right now by refusing to get in the game we will go sub scale. we are choosing by not choosing to go beyond the tipping point no choice is not an option manufacturing in this country at 9% of the gdp will grow sub scale. it will happen in your currier. in the next ten to 15 years, it will happen. and when it happens, and window hubs are created elsewhere
whether it be china or india or elsewhere, this country will lose, it will lose innovation and won't be overnight. it will be an atrophy. but believe me 20 years from now when china becomes the largest economy in the world and the have the competitive corporations around the world, the global brands on the global scale, when the of the best intellectual property generation and the patents, when they have the ability to have the best human capital in the world or science based universities in the world, then we as a country may have to settle for being the best in services we can be, and apart from hollywood and selling entertainment and the music industry and the occasional global nba game the media interested in, then our fate will be to serve china and india, and maybe that's okay, i'm calling for it to be a
national strategy to decide if it's okay because, you see, at dow my business isn't to sell movies and nba games, our business is to sell value. we want america to succeed. we want america to make things, we want to open plants and factories in pennsylvania and michigan, we want to open labs alongside them and put business centers that are creative and design the next generation technologies where there will be alternative energy, we have huge vested interest in this country. our company was born here in 1897 by a 21-year-old entrepreneur from ohio. this country is in our dna. we have enormous assets here, we of great people here, incredible partnerships, we also love the country and i'm not embarrassed to say that. we should be passionate for the
freedom model that encourages our nationalities to be the very best we can be. it's the liberation of the human spirit. what other country has done that in human history? this country deserves a better decision than the one we are making by default. if we can capture that freedom of the human imagination that we have and build out the national policy to create the next advanced manufacturing sector, and i know this country will win. it has to happen. it can happen and has to happen and we have to make the tough choices and i am very engaged as the governor said with congress and members of congress with the administration, ceos these days are spending an awful lot time in the national conversation especially those in the manufacturing sector. will your from boeing, general electric or whether you are from dow. we are out there talking to politicians to be their partners. i'm hopeful the first steps were being made certainly this year
and late last year or the right steps. in all honesty is essential that we work together that you have a role. you are critical to this. you are in fact the reason i'm speaking to an audience like this, the most important part of the decision because you see it's not a policy discussion the incipient topic it is a cultural one, it's a way of thinking. it's a wake-up call, a clarion call to young people to highly educated young people like you who chosen to further your stultz, to think through where the world is going, to look into corners, not one, to go through the dimensional chess and to basically think beyond, that three decades ago this country was centralized around infecting a high-technology to the kids could centralizes itself from the information technology and
the internet if you liked and the next decade or two for reasons that i struggle with and i promise you i would return to this with some trust ourselves around young people like you just going into the world of the financial services but that is your main job. in fact to supply capitals and credits and off the talk is a fantastic pursuit. i don't want to be what, i need capital and credit and efficiently allocated to my sector and whenever i needed it has to be there. but who said that was a more important job than the job of creating value. what made that true? what happened, why is suddenly the middleman the only man? what made the allocation of cattle the ultimate service sector? at the risk of losing my
thinking i've got to tell you i'm not sure. all i can tell you is if that is the only, god bless you. i think it is a noble job and someone has to do it. but you will serve others for the rest of your life and that's fine. and ultimately, you will be serving the companies based in china from here. i'm on the board of citigroup and ibm. i already know what's going on. the allocation of capital will ultimately be done by the owners of capital. who are the owners of capital? last time i checked on the trade deficit and fiscal deficit and the debt it isn't us. it's china. so, what's hong kong, shanghai, the centers in the far east, they will end up being the
centers of gravity. this isn't the invasion of japan we are worried about the 80's. the japanese weren't big enough, didn't skilled enough for try to take over the allocation of capital. the value of manufacturing and tell you this so much they built factories in the united states to protect factories back in japan. the kit are in the in japan. the to the national in effecting sector and by the way it is in the reason the crippled, the reason the crippled this they can't come to terms with the domestic sector that has a high savings rate, doesn't consume very much and has over inflated real-estate. sounds like california to me. so i wouldn't put my finger at japan i think it is stuck in their particular rot. the chinese they know how to manage value and they are coming. my point is, not to go to wall street, my point is to be the reason entrepreneur and the courageous leader that i know you to be, to test the edges of
your comfort zone and think through where value gets created and work through whether you want to be in the middle of the policy generation to take the country to the next level or whether you want to be serving it. to seriously consider as you do your work here how the value gets created and innovation occurs and the central piece of manufacturing to both of those things. i think if you thought about that and thought about the name of this whole and about the guy called jon huntsman, sr. and thought about his start he started working at dow. john heinz in senior started working at dow and he decided to take the clam shells mcdonald's used to have their hamburgers in which as you know later became a band and says i can do that with egg cartons. he couldn't get agreement from the corporate leaders at the time in a planned michigan to try that out so he did it on his
own. he went and bought an old oil plant and today employs 11,000 people with a multiplier effect on talked about earlier and runs a 12 billion-dollar corporation here and his son now runs it. i've got to tell you what a great role model right here. so in conclusion i want to say thank you for listening to me. i hope my words will at least cause you to think differently, to take a look at something from a different angle. i hope that your part of what i said to help to usher in a golden age of manufacturing. i will tell you, it will be the most powerful thing you wind up doing. i could tell you you have a rewarding career no matter when you do, but they fear that creates a sustainable future solving challenges at the heart of corporate responsibility for the modern era in the golden age of manufacturing sounds like a
noble pursuit to me. thanks very much for listening to me and i know jerry is going to have some questions. [applause] >> thank you. this was terrific. while we open up now to questions -- i have a question for you. how many of you would consider after what we just heard career in the advanced manufacturing? can i see a show of hands? that's impressive. typically wharton has 70% or so consulting in finance so that's incredible. thank you. the floor is yours. questions? >> okay. >> yes, please?
>> micron is coming. >> while the microphone as kind as a book outside for you to read. [laughter] it's a very easy read. it's available outside if you choose to leave early. go ahead. >> first of all, -- >> you are on. >> first of all thank you for coming and if i may say teaching in the manufacturing course -- first is regarding your comment about the future of manufacturing, don't you think it is a bit too late? most engineers -- most students in america haven't become engineers, scientists, and it's kind of our students are globally behind china, japan,
and other countries. and the second question is a bit more controversial, but you do mention that, you know, you're seeing the presence abroad increase, and how do you respond to criticism that is because you were able to cut corners, costs at the risk of the environmental disasters like the one in india, how do you respond to that criticism, and as a business leader in manufacturing, what is your view about the environment, and how do you create that in your dna going forward? >> thank you. we are proud of many statistics. last year we won the robert w. campbell award for safety. has anyone heard of that award? has anyone heard of the award on quality? so, if you had a course on
manufacturing these would be terms he would know. the campbell award is given to this corporation and environmental safety management so we won that award, the first chemical company ever to win. today one of the reasons that presence is to reverse engineer, something that is building you think dupont is fantastic and you don't know who dow is, going to change that and you're going to get that changed. i'm going to make sure you know because why? we are the safest company, we are by far safer than dupont even though dupont has the aura of that, 200-year-old, we only 100, so we have 100 years to catch up in terms of what the coast banks and there was important to bring dow's mantra and what is that? we have three values, integrity, protecting our planet, and we live it. everything we do, every business strategy that comes to us at the
top as environmental and safety check points, everything gets approved to the highest standards. we export the highest standards wherever they come from. sometimes from germany and sometimes the united states. doesn't matter. we invest in sustainability, 20% sustainability goals in the last ten years those were keogh compliant. products we make save time times the amount of co2 compared to the co2 in the making the products. we have invented a solar panel that makes it available for the masses launched in july this year coming to home depot near you. it's a solar panel that takes away the panel, put it into the shingle so when you repair the roof in the new home is automatic generator. we have invented the home and it is being built in five coasts of of the country is a home the generates power for an average family for doing things they're doing at home and of course
hybrid cars or even better but in fact when you're not using all this stuff it goes to the grid. one of the things we are proposing for the federal government is like in germany that incentivizes people to every home in america becomes a power generator. imagine that vision. how about this, the average home to that now lack of the building standard the last ten years in the united states is been built with a half a mile proximate. half a mile. we are heeding the environment and calling it. that is a lack of policies. ..
the point* that we made is especially with education salaries today 120. that is a shortage. the last time i checked checked, demand is high and the supply is short. where do chemical engineers go? no. technology. there is still enough critical mass i am not worried this is overnight but what i have done the last six or seven years is make these points going nowhere. obviously you think maybe there is no discussion but
then you talk to boeing and general electric and loophole and they say the same thing. why have we developed this? those guys from east lansing and harrisburg then they are elected out because they are less. that is the problem we have. we don't have kenya. what is the average tenure of this deal? 3.2 years. i am at seven. i have to defy gravity. it is not easy to think long-term deliver short term. to deliver long term and short term.
>> you mention the disadvantage is there any one single thing that would make a substantial debt to. >> one of my at their day jobs with the business roundtable is a aggregation of fortune 500 ceos showing a roadmap. which talks about the five buckets which is a piece of each and for example, is a lack of energy policy. just do give the example lack of energy policy i
consumed 850,000 barrels a barrel per day that is like a country. in dollar terms depending on the price of oil, 80 bucks a barrel that means my input cost is about $25 billion but if i make it quarterly that is 6 billion and if i take off the tax earnings per share with a 10% variation it is roughly $1 per share but might earnings per quarter are about $0.80 per share. i have no way to predict when earnings. but what about a national strategy?
why aren't we putting this together? do you know, how much imported oil goes into waste between buildings, cars, and consumption? we could take off half of imports from the national standards. if the governor was here he would no. because the sectors fight why retaking ethanol from corn? i tear my hair out on that one the. [laughter] is the most nonsensical use of carbohydrates god could not have done this to us five left just that alone
but our tax code which could fill this room, the loopholes. >> hello. seven coming up on in china as a threat to emphasize we need to bring together the public and private sector to gather. and those for nine months and also for nine days. my question for you is what is the next up the country should take an order to join
these forces together to help our private sector to ketchup with the countries like china and others? >> great question. the governor did not mention, mil hole two days of meetings was called state of the state. that is the question you're asking our governors. why hasn't they got the states together. and we need leadership but the state's blacks they own half of it so it takes courage. for what is going on in new jersey and wisconsin but it is beginning to address the
things that other states to dress like texas. i would go to texas all the time. texas has figured out how to be business friendly but not hurt the environment, bring the best standards and cut down procedures and bureaucrats. when the public sector employees now earns more than the private sector you know, you have too much government. the public sector earns more than the private sector? did you know, that? it is on the website. the average public sector and private sector.
>> [inaudible] >> petroleum in the age of gas with the modern products are not yet on a decline. unfortunately chemistry 5/8 you because the yield converts on carbohydrates this is getting too technical but it is much difference to you have to go the other direction for you have to say what am i doing it for? it be where we sold some of
this. we can get the materials from metals. >> 118? excuse me. we say 119 because we say that is the human element. [laughter] 118 element but truly, basically as a society we use in abundance of those and we're very limited so we have to reverse engineer some of the best hope of another direction to use plants as factories. also to engineer plants so you have read, a pharmaceuticals a greed is empathy -- improving the
heard is the other sector is the success of not-for-profit that has very profitably and successfully been the business partner so a couple of the different that was partnered with another center in pennsylvania such a partner with the third sector so what you have pri admitted to shows significant market fell your. >> there are partnerships in the local community cents we up the ante on sustainable housing it is not education base but community-based program in south philly to preserve energy. in this news. >> we don't
do large ngos the school's we're and 150 hometowns a around the world but i will follow up on the ngos side. >> thank you for joining us today in addition 270 and coming here today and your vision and incite and for addressing the critical issues especially in terms of the importance of manufacturing with the development age of manufacturing so are you suggesting a specific solution? you also talk about than